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Wednesday, 2 July 1930


Senator COOPER (Queensland) . - I listened with interest to the speeches of honorable senators who are supporting the measure; as well as of those who are opposed to it. It is gratifying to know that, in the main, they discussed the Government's proposal from a nonparty stand-point. The present price of wheat in the markets of the world is at a very low level, and indicates the great need for definite action on .the part of the Government to assist our growers. This need is the greater in view of the recommendation of the Federal Farm Board in the United States of America to all wheat-growers in that country- to reduce the acreage under cultivation so as to ensure a better price for wheat purchased for local consumption. Since the United States of America has an exceedingly large population, a satisfactory price in the home market means much to its wheat-producers. The secondary industries in that country employ many millions of workers, who constitute a valuable home market for all primary products. Active competition for the products of the land has the effect of stabilizing and maintaining prices at a fairly high level. Unfortunately, Australia is in a different position. We export approximately two-thirds of our wheat production, so our growers depend for their prosperity upon a satisfactory price in the world's markets. Our primary and secondary industries each have to face an entirely different problem in relation to the marketing of their output, and not unfrequently there is conflict in interest between the two sections of industry. The home market absorbs but a limited proportion of our total primary production. Consequently our producers have to go further' afield. In other words they have to compete in the markets of the world, and to do this they must produce on a competitive "basis. At the present time world's prices offer a very narrow margin of profit. If at any time prices are too low, our distance from the overseas markets is so great that any thought of returning production to Australia for consumption in the home market is impracticable, because of the high cost of transport. Our secondary industries unfortunately have very little interest in overseas markets, beyond an anxiety on the part of our manfacturers that the home market may be flooded with overseas products at a price which they are not in a position to meet. Our secondary industries cannot produce for export. As a matter of fact their very existence depends entirely upon capturing and holding the home market. Naturally our manufacturers take advantage of the incidence of the tariff. I have considered the underlying purpose of this bill from the standpoint of our primary and secondary industries, because their interests are interwoven in the commerce of this country. Our wheat-farmers and producers of other primary commodities being obliged to market their surplus products overseas, have no opportunity to regulate prices in the way open to employers in our secondary industries. In this respect they are at a distinct disadvantage. Not until our secondary industries are fully developed and are employing large numbers of workers will our primary industries receive any appreciable advantage from the incidence of the tariff.


Senator Dunn - The Government's proposal will help the wheat farmers.


Senator COOPER - I am attempting to show that our primary producers, and especially in this case our wheat-farmers, deserve the same measure of assistance that is given to our secondary industries. To some extent I consider that this bill will be a means to that end.

I gather from the utterances of honorable senators who have already spoken, that wheat-farmers and organizations in the different States are at variance with reference to certain aspects of. the Government's scheme. Although the Leader of the Senate (Senator Daly) informed us that there was complete unanimity at the conference of wheat-farmers held at Canberra on the 17th February last, I doubt that the majority of wheat-growers are in favour of the compulsory pooling system. Different honorable senators who have spoken to-night have suggested that the bill will interfere unduly with the free right of marketing. Some even went so far as to claim that the measure is an attempt to nationalize the wheat industry of Australia, one of our largest primary industries. I do not say that the bill goes as far as that, but I do think that unless it has the complete approval of the majority of our farmers it will interfere greatly with, the rights and privileges of wheat-growers in Australia. One aspect of the industry that is of outstanding importance both to the Government and to the people of Australia is the assistance to our financial stability that will be effected if we can encourage the export of large quantities of our wheat. The Government's inauguration of the "Grow more wheat" slogan is a .tacit appreciation of that fact.

I have previously pointed out that from its inception our wheat industry has had to depend for its existence mainly upon the quantity of wheat exported and sold abroad at world's parity. Our product has to be grown in one of the most highly protected countries in the world, and that has been a large contributing factor towards increasing its cost of production. Because of that I agree with the general principles of the bill. I believe that our wheat-farmers should be granted some measure of assistance to enable them to take advantage of our high protective policy. Numerous arguments have been advanced for and against the pooling system. I do' not intend to recapitulate them. I maintain that if the majority of the farmers in this nation-wide industry desire to organize in their own interests it is the duty of the Government to help them to do so. The Minister who is in charge of the bill in the Senate has indicated that the proposed compulsory pool will be controlled by farmers' representatives from each State, and that the Australian board will not come into operation until three or more of the large wheat-growing States have agreed to the bill. Although I cannot see that definitely stated in any clause of the measure, I am of the opinion that it is essential to have a vote of the farmers in the different States to ascertain their views on the subject. I should like the Government to state its intention more definitely in this respect. If the wheat-growers, by ballot, desire a pool, it should be granted to them. It would then be our duty to establish one and make it as efficient as possible. I realize that we have but four wheat-growing States of any magnitude, "Western Australia, South Australia, Victoria and New South Wales, and I believe that any majority of the States asking for a pool should include at least three of those that I have enumerated. The States that will have to bear the greatest loss should the guaranteed price not be realized should have the final say as to whether a pool should be established or otherwise. I should like to see incorporated in the bill a provision similar to that regarding referendum proposals, to the effect that there must be a majority of the States, and a majority of the farmers of the Commonwealth, voting in favour of a pool.

One thing that has tended to bring into disfavour the private handling of wheat is the enormous amount of speculation that has taken place in this great national commodity, particularly on the New York and Chicago exchanges. Actual sales of wheat have been made amounting in the aggregate to more than 40 times the quantity of that commodity available for sale at the time. It may be claimed that such speculation tends to increase prices,' but I am of the opinion that unreal price fluctuations caused by speculation of that type are disadvantageous to the farmer. I do not think that the bill will entirely eliminatesuch speculation, as Australia exports only oneeleventh of the world's wheat; but it should obviate wild-cat speculation in at least a proportion of the world's wheat.

I do not believe that the bill will give the very best assistance to the farmer. Personally I should prefer to see the industry encouraged by a bounty. That would not materially interfere with the present system of financing and marketing wheat that has been built up over a number of years, and at a considerable cost by private enterprise. Surely it would be to our advantage to continue to utilize the facilities at our disposal for the purpose. We should content ourselves with granting a bounty and concentrating on the growing side of the industry, leaving the selling side to be managed in its present efficient way. For the past twelve months Germany, France and Italy have granted bounties on wheat grown in their respective territories. In this bill the Government guarantees 4s. a bushel for all wheat delivered at country sidings. That guarantee will, however, operate for only one year, although the compulsory pool itself will continue for three years. The farmer is rather in the dark as to what will happen after the first year. A bounty would have been preferable to the system proposed in this bill, for, at the end of the first year, a bounty could be withdrawn if necessary, and the industry left in the position in which it was previously. But once our marketing arrangements have been upset for a term of three years, it will be difficult to re-establish them in the event of the pool being disbanded. There is also the objection that any loss must be borne equally by the States and the Commonwealth; but, as that is a matter more for consideration in committee, I shall not deal with it now. I agree with the general principles underlying the bill, and, therefore, I shall support the second reading, while reserving the right to discuss amendments when the bill has reached the committee stage.

Debate (on motion by Senator E. B. Johnston) adjourned.







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